HMRC opened a consultation entitled Raising the Stakes on Tax Avoidance which contains proposals to tackle tax avoidance, including proposals for information powers, the use of a “high-risk promoter” concept and penalties for promoters and for “follower” penalties. The consultation closes for comment on 4 October.

Specifically, views are sought on proposals in addressing the behaviour of promoters to increase transparency and obtain information about their products, intermediaries and users. The notion of a “high-risk promoter” is advanced; an agent who in HMRC's view conducts themselves in a manner which is “detrimental” to fairness. The kind of detrimental conduct cited includes:

• designing, marketing or implementing products that on analysis have negligible probability of working
• relying on non-co-operation with HMRC to achieve a tax advantage for their clients
• selling products that rely on concealment and mis-description of elements to succeed.

High-risk promoters would be subject to a different penalty regime if schemes went wrong. Though the term evasion is not used in this consultation, it is hard to distinguish where HMRC's view of avoidance stops and evasion starts.

The consultation also seeks views on proposals that would oblige taxpayers who have used avoidance schemes which are defeated in another party's litigation to amend their tax returns accordingly, referred to as “followers” in the consultation. They would face a tax-geared penalty if they could not satisfy HMRC there was a reasonable basis for not making an amendment.

Finally the Government also seeks views on a proposed extension to the prescribed information to be provided under the Disclosure of Tax Avoidance Schemes rules.